Section image

20. Going concern and liquidity risk

In considering going concern and liquidity risk, the directors have reviewed the Group’s future cash requirements and earnings projections. The directors believe these forecasts have been prepared on a prudent basis and have also considered the impact of a range of potential changes to trading performance. The directors have concluded that the Group should be able to operate within its current facilities and comply with its banking covenants for the foreseeable future and therefore believe it is appropriate to prepare the financial statements of the Group on a going concern basis.

At 30 June 2010, the Group had access to £4.9 billion of committed funding with maturity dates spread over the years 2010 to 2020 as illustrated below.

Maturity by year

Maturity by year


£m
2010
£m
2011
£m
2012
£m
2013
£m
2014
£m
2015
£m
2016
£m
2017+
£m
£ bonds £200m (6.375% ’20) 200.0               200.0
£ bonds £400m (6.0% ’17) 400.0               400.0
Eurobonds €750m (6.625% ’16) 614.5             614.5  
Eurobonds €500m (5.25% ’15) 409.6           409.6    
£450m convertible bonds (5.75% ‘14) 450.0         450.0      
US bond $650m (5.875% ’14) 434.4         434.4      
US bond $600m (8.0% ’14) 401.0         401.0      
Eurobonds €600m (4.375% ’13) 491.6       491.6        
Bank revolver $1,600m 1,069.3     1,069.3          
TNS acquisition revolver £400m1 400.0 200.0 200.0            
TNS private placements $55m 36.8     20.0   16.8      
Total committed facilities available 4,907.2 200.0 200.0 1,089.3 491.6 1,302.2 409.6 614.5 600.0
Drawn down facilities at 30 June 2010 3,929.7 511.8 491.6 1,302.2 409.6 614.5 600.0
Undrawn committed credit facilities 977.5                
 
Drawn down facilities at 30 June 2010 3,929.7                
Net cash at 30 June 2010 (952.0)                
Other adjustments 51.1                
Net debt at 30 June 2010 3,028.8                
Notes
1
Facility reduced to £200m on 9 July 2010

The Group’s borrowings are evenly distributed between fixed and floating rate debt. Given the strong cash generation of the business, its debt maturity profile and available facilities, the directors believe the Group has sufficient liquidity to match its requirements for the foreseeable future.


Treasury management

The Group’s treasury activities are principally concerned with monitoring of working capital, managing external and internal funding requirements and monitoring and managing the financial market risks, in particular interest rate and foreign exchange exposures.

The Group’s risk management policies relating to foreign currency risk, interest rate risk, liquidity risk, capital risk and credit risk are presented in the notes to the consolidated financial statements of the 2009 Annual Report and Accounts and in the opinion of the Board remain relevant for the remaining six months of the year.

Share This

Close